The Nigerian National Petroleum Corporation (NNPC) has justified its N147 billion June remittance to the Federation Accounts and Allocation Committee (FAAC), noting that it is line with the terms of agreement it had with governors on the matter.
Ndu Ughamadu, Group General Manager, Group Public Affairs, NNPC, said this in a release noted that the agreement the corporation had with the governors was that it would make a monthly remittance of N112 billion to FAAC subject to sufficient funds from sales of domestic crude oil allocation for the corresponding month after meeting cash call obligations on JVs, deductions of Premium Motor Spirit (PMS)-cost under recovery and pipeline maintenance.
He further noted that NNPC was able to surpass the terms of the agreement with the governors on the monthly remittance for the month of June by N35 billion. He also expressed displeasure by the demand by the Governors for additional request of N40 billion.
Recall that the monthly meeting of the Federation Account Allocation Committee (FAAC) ended in a deadlock on Wednesday in Abuja. For some months FAAC participants have been experiencing difficulties in agreeing with figures because of revenue remittance discrepancies due to the Corporations inability in remitting all revenue accruing within the month.
Chairman, Governors Forum, Abdulaziz Yari, Governor Zamfara State had recently accused the NNPC of under remiting into the revenue purse.
Yari noted that the Governors were not satisfied with the way remittances are being made because there are so many questions raised, especially on the 425,000 barrel domestic and 180,000 barrel component of Nigeria from the Joint Venture Partners.
According to the Governor, section 196 of the Act establishing the Department of Petroleum Resources (DPR) mandates all royalties be paid to DPR and then transmitted to the Federation account. This he noted is not observed by the NNPC.
An allegation the NNPC has always denied. According to its Group Managing Director, Maikanti Baru, accusation of non-remittance of funds is occasioned in part, to the nature of the corporation’s operations which involved credit lines requiring constant audit and reconciliation.
However, a forensic audit report by KPMG of some revenue generating agencies shows that a total sum of ₦526 billion and $21 billion was underpaid to the Federation Account.
The Federation Allocation Accounts Committee has representatives from the 36 states including the FCT and it is chaired by the Minister of Finance. It meets monthly to share revenue accrued to the Federation Account to the three tiers if government.
